Latest interesting guest post by Brian Seidman who has over 20 years’ entrepreneurial and Foreign Direct Investment (FDI) experience in the US, Ireland and Europe successfully creating, managing, advising and assisting private and public (NASDAQ and LSE) companies, particularly in the technology, software and Internet sectors in a wide variety of markets.
That Ireland has been very successful at attracting high-value Foreign Direct Investment (FDI) by both well-established and high-growth companies, particularly from the US, is without question. The track record is well publicized and promoted: 9 out of 10 global software companies, 9 out of 10 global pharmaceutical companies, 15 of the top 20 medical technology companies, over 50% of the world’s leading financial services firms, etc., etc., have set up significant operations in Ireland.
It may well be hard to argue with success, but the promotion and marketing of Ireland as a home for FDI investment from the US is too often reduced to a high-concept “Why Ireland” bullet-pointed list of high-level facts regarding Ireland (many of which are shared by other European countries):
12.5% corporate tax rate
Access to skilled talent across the EU
Access to EU market
Cost of business
These high-concept, high-level facts are certainly important reasons why Ireland has been so successful at attracting US FDI, and should be part of the marketing and promotion of Ireland as an FDI home.
But, as important as such high-concept, high-level facts may be, they are only a start, as they overlook an overall more important reason why US FDI companies have been so successful setting up and operating in Ireland: The business and social cultures – the customs, behaviors and norms – of Ireland in which such US FDI companies and their employees actually operate, work and live in.
Culture is a big word. But it is a vitally important one to any FDI company deciding where to set-up in Europe. The intertwined business and social cultures of a country affect every facet of a company’s business life and the lives of its employees. Ultimately, the business and social cultures of the society an FDI company chooses will determine the company’s:
Speed and efficiency in setting up operations in Europe; and,
The success of those operations in Europe.
Ireland is unique as a European country in that it is considered by other Europeans to be 50% European and 50% American; that Ireland is not just the geographically closest EU member state to the US, but the closest culturally as well. [i] And there is much truth in that. A prime example is the work culture of Ireland. Fairly or not, many Americans have a stereotypical view of Europe as a 9-5 business culture with 9-5 employees. US companies, particularly technology companies, will in reality find a work culture in Ireland not dissimilar to the US: a work culture familiar with and readily adaptable and accepting of US, and in particular technology company, work culture.
As important as Ireland’s 12.5% corporate tax rate or any other high-concept, high-level fact, that US companies and US personal sent to Ireland find its business and social cultures easy to understand and adapt to, and thus navigate, manage, operate, work and live in, are the real factors that make Ireland such a successful location for US FDI. And whereas Ireland does share some of the high-concept, high-level facts that companies consider in their FDI short-listing and decision making, no other European country, including the UK, can offer US companies Ireland’s business and social cultural similarities.
As such important differentiators between Ireland and its competition for FDI, the business and social cultural similarities between Ireland and the US should be a greater part of the promotion and marketing of Ireland as the best choice for US FDI.